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It is the first-time King O'Malley's has spurned New Year's Eve revellers in a decade, closing on December 23 for two weeks.

Managing director Peter Barclay said the break was in anticipation of a busy centenary year for Canberra.

Mr Barclay said the bar would stay open with food until midnight, every night, in 2013.

"It's going to be such a huge year that, if people can't get a break now, they won't get one because there's too much happening," Mr Barclay said.

"We consulted with our staff and overall we were happy to take this unique opportunity and have a longer break."

West Row cocktail lounge Muddle Bar has closed for the second year running.

With Canberrans traditionally fleeing the capital over the summer shutdown, co-owner Joel Scott said the Christmas period was a quiet time for the venue.

"We get a lot of pre and post dinner people but a lot of restaurants are closed at this time of year," Mr Scott said.

"Opening for New Year's Eve wasn't too bad for us but in the end it comes down to the fact that you reopen for three or four days for the sake of one night.

"We run a small staff so it's hard for us to take time off during the year, so this is the easiest thing to do."

Mr Scott said Muddle Bar would reopen on Friday.

Australian Hotels Association ACT general manager Brad Watts said the cost of running during the holiday period had forced many bars to cut their losses.

"It just shows how tough the market is and how challenging it is for the industry at the moment," Mr Watts said.

He said cost increases for electricity, wages, security staff, food and drink had combined with increased regulation and the traditionally slow Canberra summer to stall the industry.

He said some venues had recorded a 20 per cent drop in trade across the year. "With a lot of people from Canberra going away, it makes it quite difficult for licensees to make a decent profit on the night," Mr Watts said.

"Given all the cost pressures and the tough trading for 2012, a lot of venues have decided to close for New Year's Eve.